Bitcoin’s value has continued to fall as key worldwide cryptocurrency lenders have taken a trading pause, as well as interest rate hike speculation.
- The price of Bitcoin has dropped by more than 16% in the last day.
- By selling, investors are anticipating a rise in interest rates that could be much more aggressive.
- Constant speculation regarding Celsius’ ability to fulfill its promises was fuelled by a suspension of trading.
There has been a 16 percent drop in the value of Bitcoin (BTC) in the last 24 hours. At the time of writing, the most valuable coin in the world was trading at $22,187. As a result, Bitcoin’s price rose to levels not seen since December 2020.
BTC has fallen 53% this year and 68% since its all-time high on November 10th. The gloomy tone in the crypto community is reflected in the market capitalisation. Following a 9.96 percent decline during the previous day, this indicator missed the trillion-dollar level, changing hands near $933 Billion.
What’s Causing Bitcoin’s Decline?
Bitcoin is under downward pressure due to two issues. It appears that Friday’s unexpectedly high inflation data from the US are the main factor. Meanwhile, inflation in the world’s largest economy is rising at its fastest rate in 40 years. In May, the number was 8.6%, up from 8.3% in April. Inflationary expectations were dashed by these readings. Furthermore, it heightened concerns about the Fed’s potential for more aggressive tightening in the near future..
The US Federal Reserve is scheduled to meet on Wednesday, and market participants estimate a 0.50 percent rate increase.. In light of the most recent figures on inflation, economists now expect a rate hike of up to 0.75 percent. Such a scenario led to a resumption of selling in risk assets, especially high-growth technology equities. The Nasdaq closed the day down 4.7%, while the S&P/ASX (ASX: XTX) is down 6.7%.
The current sell-off isn’t the first time that cryptocurrencies have followed riskier markets throughout the year. Following significant losses, Bitcoin and the majority of large-cap cryptos remain in the red.
Another Factor Affecting Cryptocurrency Prices
The news that the top cryptocurrency lender Celsius Network had temporarily halted trade over the weekend fueled the bears’ momentum. Bloomberg publications cited rumors that Celsius may not be able to achieve its claims of large returns on items.
Celsius (CEL) was trading at 27 U.S. cents at the time of this post, down 28 percent in the last 24 hours. CEL, on the other hand, has dropped 60% of its value since the Friday before.
Steven McClurg, the co-founder of Valkyrie Investments, issued a warning regarding further losses in the market. He said that the market doesn’t have enough fundamentals to support a recovery and price stability. If anything, things are going to become worse before they get better.